Workforce reductions cost
Aon US$103 million (£79.5 million) in the first three months of 2017 as the brokerage giant continued to implement its restructuring plan, it has been revealed.
Announcing its first quarter results on Tuesday, the broker reported a rise in total operating expenses to US$2 billion due to restructuring costs amounting to US$144 million.
The restructuring expenses were primarily driven by the workforce reductions, according to Aon’s financial report.
The broker also revealed that another US$104 million of costs were expected from further workforce reductions.
Meanwhile, savings in the first quarter related to restructuring activities and other operational initiatives were estimated at US$11 million. Aon expects US$400 million savings annually by the end of 2019.
For the first quarter, Aon’s total revenue reached US$2.4 billion, up 5% over the same period last year. Organic revenue growth was 4%.
Aon’s core brokerage business, commercial risk solutions, recorded a 2% increase in organic revenue driven by solid growth across the US, EMEA, Asia and Pacific regions, and partially offset by a decline in Latin America.
The company’s reinsurance business increased its organic revenue by 2% amid growth across every product line, although it was partially offset by a modest unfavorable market impact globally.
“Our first quarter results reflect a strong start to the year driven by investments in our client-serving capabilities and operating model. Organic growth of 4% is the strongest start to the year since 2012,” said Aon president and CEO Greg Case.
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